ICASA on customer journey, role of data and loyalty in the service station of the future
The key part of ICASA’s business is helping retailers future proof their service stations. Martine Thijs, Global Strategic Accounts at ICASA, discussed with PetrolPlaza the biggest challenges for fuel retailers in today’s market and what role ICASA plays in the new reality.
With more than 30 years of experience in the energy sector ICASA is a major player with its total and integrated cloud solution for the management of all energy activities. ICASA aims at guiding its customers throughout the energy transition in supporting all energy types (petrol, gas, hydrogen, EV charging). And actively strives to fulfill the business processes of its customers with the ICASA Suite, not only focusing on today’s requirements, but also enabling them in evolving from an energy supplier to a mobility provider. And doing this using a secure and reliable cloud solution.
One of ICASA’s business is helping retailers to future proof their service stations. Something that you’ve been working on for many years now. What are some of the biggest challenges that you see for fuel retailers today?
“Fuel retailers have had challenges throughout the years but actually the challenges have never been bigger than today. Those challenges are caused by first of all the energy transition, they’re caused by something as volatile as Mister Customer, who is changing his behaviour and his expectations completely. It's also implicated by technological changes and the environment, like smart cities etc. Mobility-as-a-Service is another big driver and then there are – and that is definitely an element that needs to be considered by the retailers – new kids in town, there are new competitors that come on the scene from a different angle because of where the sector is evolving. Those changes are so big that today there is no option for not changing, to be very honest.”
The business is becoming more customer centric and every day we see that through digitalization and the use of apps the relationship is changing between the operator and the customer. How that relationship has developed over time and what is the role ICASA plays in that new reality?
“Actually we come from an era where the petrol stations were vehicle centric, where everything was to do about refilling your car in the station. And so there was a little bit of convenience, get the customer his coffee and his crisps when his car was refilled. But you’re now in a completely different situation. In the past we talked about petrol stations, but now we’re talking about convenience stores and retails hubs. So that one is indicating already that fundamental shift. It’s about the customer. The customer actually wants to share information about what he wants, what he has, what he is looking for. But in exchange he wants that, by the time that he gets to the station, things that he has ordered – maybe while he was driving – actually are waiting for him. That customer is interested in sharing information about what he wants and uses where, so things like loyalty and frequent flyer programs that include hotels are also part of the experience.
There is also the shift for mobility services. Services that are publicly accessible, collective use up to individual and private access. We’re talking about ride sharing, ride hailing, peer-to-peer car sharing. The focus on how they want to move is shifting. What is important to know, is that all of these things depend largely on geographical area. What works in town, what works on a highway station is not necessarily the same as what works in a rural area. But there are for all of those mobility services, that’s a trend that is happening all over Europe. So it’s not anywhere in particular.
Another element in that customer journey is the generation. You and I are from a different generation. How I look and how I was raised with my view on what a car is and what a car means, is different than what you are doing. If we look at the baby boomers, generation X, they wanted to have that car to be master of their own mobility. Whereas the later generations are actually looking at what’s convenient. I might be tempted to get with my car into driving to Brussels where I’m almost definitely going to have traffic jam but my son definitely is not willing to do that. The younger generations are interested in paying maybe a little bit more but for sustainable solutions. So share something, take the Uber, don’t own a car because it doesn’t make sense to have that car standing there and being blocked with it. But also it is a matter of the investment, the cost for that.
There is from that customer side also the thing about the pandemic. The pandemic is now winding down, so I think we will see the effect of that one dwindling. But definitely talk last year, talk 2020 people were far less mobile, far less moving about. So that one definitely had an impact on how a station or how that retail hub should interact with its customers.”
Before we move on to the next topic I wanted to touch upon something you mentioned. The retailers have a challenge with younger generations to have that kind of loyalty and fidelity. Do you feel that those retailers that don’t adapt quickly in terms of offering this new customer experience through kind of a mobility hub, do you feel they find it hard to keep these younger generations as loyal clients?
“Yes, I think so. I think that the younger generation really wants to share and make sure that what they are offered is based on what they have shared. I think the loyalty and also that interconnection are important. For instance, I’m coming to a big station where there is also a hotel facility. Can I use my loyalty left and right? Can I get customized offers that really bring the best of the package for me and for what I’m interested in, what I’m usually doing? Knowing your customers in order to bind them is much more crucial to the younger generation than the elder generation. There is definitely a gigantic difference.”
When we talk about a station becoming a mobility hub, there is a key part which is data. This is kind a like your bread and butter. What is the role of data in this kind of new station that we’re seeing happening right now in front of our eyes?
“Actually, data is the new petrol, it is the new gold. Data about what a customer is, where he is, how he is moving about, what he usually does, what he spends time on. That is actually the main source for building up your business strategy towards the future. It allows you to see where in my shop or in my station with different services is a given customer walking around? Is he using certain services like a laundry area for instance? Is that something that works for the customers? Combine that information to make sure that you use the space that you have available in your environment in an optimal way. Make sure you optimize your stock. Data is really the only thing that will help us to optimize the strategies for the retailers.”
Along with data, obviously this has all come through the incredible development of technology that we’ve seen over the last decades. We never know what’s going to be next. The change could be around the corner and we can’t even imagine what it’s going to look like. If you look towards the near future, how will technology produce new ways of customer engagement?
“How technology will help in engaging customers, here you need to think about the concept of smart cities. We all want to go net zero by 2050, which means that the cities will have to take some steps to make that happen. Cities have a lot of systems, sensors, cameras, whatever in place that can provide information to steer that city, to steer the access to that city. There is this whole digital infrastructure that gives them information about what is their congestion somewhere or where is the nearest parking. If I as a customer get into town and I want to see how I can best get to that parking or to my business lot, that is something that is made possible by that interconnection.
These systems that report about the busyness in town can be used to even further extent if you look at the connected cars. Autonomous vehicles can be automatically re-steered using the information that is there. The smart cities are by definition much more AV based. So solutions for the last mile delivery is something that becomes very necessary. Last mile delivery is when you have your big loadings on the outskirts of the town and then you just do your deliveries with AV based vehicles.
Also with AVs, automated vehicles, this is an opportunity for busy working young parents. Busy young parents have kids and those kids need to go to sports club, to their music or arts classes. If you think about it, most parents are running around making sure that is all happening. Whereas if you imagine that there is an app where you can just rent an AV that will come and pick up the kids and bring them there, that is something that would save you a lot of time. On the other hand, if you look at people of my generation, they have elderly parents that often still have a car. AV just could be a safer way to transport them to wherever they want to go. I think that will be helping the generations that are working to make sure there are extra things that make their life more manageable and more organized.
We are all bound to our mobiles, and so mass mobility as a service is all about how can I run my journey over the various types of mobility in one app. So technology is again a core element in providing that. There are many apps out there that do the combination of public and private transport. Basically, me as a customer, when I think about going on a trip, I want to plan it, I want to book it, I want to pay for it. When I am in my trip, I try to get feedback whether I should change my means of transport or whatever. These are things where technology is going to help build up those new models. The whole mass is really like business ecosystems where multiple partners are playing a role and this is a section where companies like ours can provide quite a bit of the functionality. It can function as an integrator between ticketing systems, between routing and planning etc. So this is definitely an area where there is a lot of growth happening.”
I think many people can see the benefits. You mentioned quite a few of them: smart cities, smart mobility, including autonomous vehicles, what benefits they could have for various social groups, as well as many other things. However, the question is, these changes in ownership, in energy types. What kind of impact will it have in convenience stores, but especially in service stations? Where does it lead them?
“This disruption is more a threat than an opportunity. I think that is the first thing to mention. It is something to think about. And there is a big difference. If you look at stations and where they are geographically planted, the impact will be different. I think the impact and the threat would be the smallest to highway stations. Highway stations will be long-distance traffic, people will take a rest there and trucks will still be there. It will be a while before trucks will be on EV or hydrogen, but in any case they will still need to rest and to have the type of services that you have today in a highway station. So those areas – the convenience and extra services – are becoming important, but I think those stations will be the least threatened by what’s happening.
On the other side of the spectrum are the unmanned, so ‘the fuel only’ sites. I think when you look at the whole energy transition, if you depend only on petrol, that’s a bigger trend. Unless you stand changing things there. If you look at urban or suburban stations, there you can see much more opportunities. The suburban ones might be thinking: how am I going to evolve towards a place where I can be a switching point? For instance, provide parking for the customers that come, so that they can rent an e-bike there to go into town, go shopping or whatever, and then come back. Meanwhile, their car is charged etc. So it is about looking at the offering that you bring. And in the center, the in-center retail stations – there the margin or the space for petrol is much less. People are going to use other charging points for their cars, but those locations might be ideal to look at converting them so that they become real retail hubs. I think that the picture I am trying to paint is that, as a retailer, you just need to look at your network. You need to see where your sites are planted and how that should affect what you are doing there. Try to make sure that what you get from your normal business into those extra segments. For instance, there is a company that actually drives around with a truck to just fill up the cars and does car washes on parking lots of business areas. There is even one company, I think it is Zumo, based in UK, where they come and pick up the cars while people are working to just charge them on their premises. I think it is extending a bit the focus of what you are doing. It is staying within your comfort zone, but stretching the limit.
I think what is also important is that the retailers need to build on relationships with new partners, like with the cities, to make sure that they are a part of the renovations that are happening. To make sure that they are not missing the evolution”.
That is very interesting. So you agree that it is better to be a part of the conversation. With all that we have discussed and some of the data that you manage as ICASA and some of your own views, we’ve seen some really interesting concepts. We saw the Aral station two years ago – the first kind of mobility hub station, we’ve seen some very interesting ideas that will be implemented in short term. But if I ask you about an average station, perhaps not on a highway, perhaps something outside the city – how do you envision the service station of the future? What do you think will be essential to have or what we will not see in those stations?
“I think that the evolution will be that you need to provide all energies. That’s number one, because whether you like it or not, that is the reality. So just petrol will not do the thing. I think that convenience is the key. And convenience in two ways: in what I can buy, first, and convenience in the sense that it is convenient for me to just do it while I am refilling my car. I am using the term “refilling” which for me can just as well be with electricity or with hydrogen as with petrol. It has to be convenient to just refill my car and at the same time do the rest of the things that I am doing.
Electricity, EV charging – for the moment it still takes a while. So look at things like: is there a way that you can offer a co-working space, so that, while the car is being re-charged, they can have a small desk where they can work and discuss? Make it a social hub, private or professional. I think you need to consider the combination of mobility and services. Make sure that there is a capability of switching one mode of transport to the other, if that is on the outskirts, to be able to capture people come by car and then go into town.
And retail. I think that the retail component is really important. Look at systems like click-and-collect, click-and-deliver. If you have a parking lot where people leave their cars and then go into town, then look at systems like in-car deliveries, so that I can order my things while I am at work and then in the evening when I get back – my groceries are in the car. People are willing to share information and share what they do and where provided that it is about convenience. So it is about making it convenient for the customer to just come and stay with you. Make sure that you understand that those are the main elements.”
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